The Portuguese Tax Authority (PTA) is one of few countries that has taken specific steps to create a framework defined framework for cryptocurrency taxation, helping to provide a great amount of clarity on the murky subject.
This came a result of an unidentified company seeking guidance on whether or not its token was covered by value added tax (VAT) exemptions similar to what are offered for legal tender. The announcement, like most tax provisions, contain general provisions and exemptions as noted below:
Transactions that contain a token could, in principle, be considered as a critical transfer of goods and result in a VAT liability. However, the PTA acknowledged that the digital coins could be eligible for the legal tender VAT exemption.
The PTA explained that the exemption would only be applicable in instances where the transfer of the tokens occurs in an alternate form of payment. This means that, the tokens most likely would be exempt if they are exchanged using a defined legal currency.
Since the VAT system is used among all European Union (EU) member states, the decision by the PTA most likely will be mirrored throughout EU states. This is a large step forward for the global crypto-community who is looking to move the industry forward by aligning with new regulations for mainstream adoption.
Are you looking for a CPA in for cryptocurrency tax help? Give Camuso CPA a call today. We also offer a host of other tax services for your benefit. For more information on how our services can help you, please do not hesitate to give us a call at your earliest convenience. One of our friendly and knowledgeable representatives will be happy to answer any questions that you may have.